Wells Fargo seeks arbitration with customers, dismissal of suit

Wells Fargo Bank has asked a federal judge to dismiss a
class-action suit filed by customers and instead order private
arbitrations. File photo by Vividrange/Shutterstock

Wells Fargo
wants a federal court to dismiss a class-action lawsuit by customers
over the bank's unauthorized accounts and instead compel the to settle
the in private arbitration.

The San Francisco-based banking giant filed the motion in Utah on Wednesday.

It's the first class-action lawsuit filed
after Wells Fargo agreed to pay $185 million in penalties and $5 million
in customer reimbursement after opening 2 million accounts without
customers' authorization.

In September, Wells Fargo settled with the
Consumer Financial Protection Bureau, the U.S. Comptroller of the
Currency and the city and county of Los Angeles.

Wells Fargo says the class-action suit is an
"unwieldy" case of 80 customer-plaintiffs and 17 legal causes of action
against the bank.

In a statement, Wells Fargo said it makes "every attempt" to resolve complaints directly with customers before going to arbitration.

The bank said it's offering "fast and free" mediation to customers through an impartial third party.

Zane Christensen, a lawyer representing customers in the suit, said it will "vigorously defend" against the bank's motion.

"Wells Fargo isn't concerned about making
things right with their customers. Wells Fargo is worried about making
things right in public relations," Christensen said.

The Consumer Financial Protection Bureau is
considering rules to prohibit banks, credit-card issuers and other
companies from forcing customers to submit to arbitration and waive
their right to join class-action lawsuits. But President-elect Donald Trump and a Republican-led Congress might scale back its regulations.

"Wells Fargo's managers and bankers have for
years engaged in unethical, and illegal practices called 'gaming,'" the
suit argued. "Gaming consists of, among other things, opening and
manipulating fee generating customer accounts through often unfair,
fraudulent, and unlawful means, such as omitting signatures and adding
unwanted secondary accounts to primary accounts without permission.
Other practices utilized as part of these 'gaming' schemes have included
misrepresenting the costs, benefits, fees, and/or attendant services
that come with an account or product, all in order to meet sales
quotas."